California Supreme Court to hear challenge to San Jose affordable housing law

The California Supreme Court has agreed to weigh in on a legal challenge to a San Jose law that would require housing developers to include affordable units for low-income buyers on new projects in the city.

In a brief order released Wednesday after the justices' weekly closed-door conference, the Supreme Court decided to review an appeals court ruling earlier this year that reinstated the so-called "inclusionary housing ordinance" approved in January 2010. The California Building Industry Association has challenged the law, arguing it would force developers to pass on to buyers of their new homes the costs for the below-market units, driving up already high Silicon Valley housing prices.

San Jose would require developers to offer 15 percent of units in new projects of 20 or more units at below-market rates, with a goal of avoiding concentrating affordable housing projects in redevelopment areas where they are already required. Developers could opt out of building the affordable units by paying a fee instead, which the housing industry has estimated could run about $122,000 per house.

Last year, a Santa Clara County judge invalidated the law, concluding that San Jose city officials failed to show that new home construction creates an affordable housing shortage. But the San Jose-based 6th District Court of Appeal reinstated the law in June, concluding the lower court used the wrong analysis and must re-examine the case.

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The state Supreme Court will receive legal briefs on the conflict in the coming months and at some point set the case for oral argument.

Howard Mintz covers legal affairs. Contact him at 408-286-0236 or follow him at Twitter.com/hmintz.